July 5, 2019 / 2:31 PM / 3 months ago

CANADA STOCKS-TSX heads lower as gold dip hits materials stocks

July 5 (Reuters) - Canada’s main stock index fell on Friday, as falling gold prices dragged down materials stocks and a strong rebound in U.S. job growth in June drove investors to pare bets of an aggressive interest rate cut by the Federal Reserve.

* At 10:09 a.m. ET (14:09 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 85.37 points, or 0.51%, at 16,503.48.

* Materials stocks, which include precious and base metals miners, slumped 2.7%, the most among the major 11 sectors. Gold prices fell nearly 2%, hitting stocks such as Kirkland Lake Gold and Iamgold Corp.

* Globally, risk assets have rallied in the first half of 2019 on hopes of major central banks turning more dovish. However, better-than-expected U.S. job additions in June showed the economy was on a strong footing, leading investors to scale back bets of a 50-basis point rate cut in the Fed’s July meeting.

* Meanwhile, the Canadian economy shed a net 2,200 jobs in June after two months of gains, but wages jumped by the most in more than a year - a sign of strength analysts said ruled out the chances of the Bank of Canada cutting interest rates next week. The Canadian dollar weakened on the news.

* Both reports tempered expectations of looser monetary policy, which has supported equity markets in the recent months.

* The financials sector, which tends to benefit from a rising rate environment, gained slightly.

* The largest percentage gainers on the TSX were Gran Tierra Energy Inc and Kelt Exploration Ltd which gained 3.1% and 1.8%, respectively.

* NovaGold Resources Inc fell 4.8%, the most on the TSX, while the second-biggest decliner was Kirkland Lake Gold Ltd, down 4.6%.

* The most heavily traded shares by volume were Barrick Gold Corp, B2Gold Corp and Encana Corp.

* On the TSX, 68 issues were higher, while 162 issues declined for a 2.38-to-1 ratio to the downside, with 25.25 million shares traded.

* The TSX posted two new 52-week highs and no new lows.

* Across all Canadian issues, there were 12 new 52-week highs and eight new lows, with total volume of 43.38 million shares. (Reporting by Sruthi Shankar in Bengaluru; Editing by Maju Samuel)

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